For China, one overlooked consequence of the Russia-Ukraine war
In the immediate aftermath of Russia’s invasion of Ukraine, Russian coal exports were steeply discounted. China has capitalized, but at the expense of its commitments to decarbonization.
Russia’s invasion of Ukraine on February 24, 2022 triggered increased global instability and unrest. One of those ramifications has been surging energy prices. Countries around the world began to feel the impacts of increasing prices, but China, among the states most heavily reliant on Russia’s oil exports, felt it the most. On the one-year anniversary of Russia’s invasion, it’s important to consider the often overlooked effects the war has had on China’s ability to meet its climate goals.
In response to newer threats to energy security post-invasion — such as price volatility, supply constraints, and general supply chain management — China turned its focus to prioritizing the protection of its own domestic energy supply. However, energy security in China was already a major concern. In 2021, China’s plans to accelerate its transition to cleaner energy by using more renewables were partly derailed when parts of the country experienced forced blackouts and load shedding. The combination of past negative experiences coupled with the heightened instability over energy supplies in light of the invasion meant that China doubled down on prioritizing its energy security. The increases in natural gas prices, necessary for utilizing renewable energy, meant China needed to reevaluate its energy mix.
But this focus on security came at the expense of China’s commitments to the path of decarbonization and its goals of 2030 peaking and 2060 net zero emissions: It returned to coal.
In the immediate aftermath of Russia’s invasion, Russian coal exports were steeply discounted. Russian coal at Baltic ports was being sold at discounts ranging from 41% to 67%. China saw this as an opportunity to capitalize amid growing uncertainty on the war’s progression and the potential ramifications of extended global instability. In May 2022, Russian coal exports to China rose 20% year-on year (5.5 million tons). In June, it rose by 55% (6.2 million tons).
In conjunction with increased coal imports, China also looked to increase its coal mining to provide even greater domestic energy supply stores. In 2021, China increased coal plants by 25 GW and started construction on 33 GW of coal generation. Comparatively, the rest of the world only started 10 GW of coal plants. In February 2022, fossil fuels were still accounting for almost 60% of electricity generation. China’s focus on capitalizing on cheaper coal imports, coupled with increased coal mining domestically, meant that it was in a position to better ensure it would meet its domestic energy needs — at the expense of expanding renewables.
According to 2022 reports, the growth rate of coal usage in China remains ambiguous. New preliminary data from the Chinese government suggests that there was a 3.3% increase in the demand for coal. However, minimal growth and declines in some areas of major coal consumption areas contradict the reported level of growth. The accuracy of that number is important given its relationship to carbon emissions. Some reports suggest a 1.3% increase in the nation’s carbon dioxide emissions during 2022. However, other figures suggest a 0.9% decline. Either way, the implications are alarming. China cannot afford increases in its carbon emissions if it wants to meet its goals, and a decline rate of 0.9% is not enough, especially when the decline is partially linked to COVID policies that locked down Shanghai for two months, hampering economic productivity.
China’s bold pledges to achieve 2030 carbon peaking and 2060 carbon neutrality rely heavily on its commitment to both its domestic climate agenda and the goals outlined in international forums like the Paris Agreement and COP 27. The overarching goal of the Paris Agreement is to keep global temperature rises below 2 C above pre-industrial levels, with further efforts to keep that rise below 1.5 C. To achieve this, countries must be limiting carbon emissions, and China’s status as the world’s largest emitter is integral to this.
The Russia-Ukraine war hasn’t just affected China. It has created significant instability in the international community. Indonesia and India, unable to keep up with soaring prices, resorted to burning more coal, and the European Union that imports approximately 43% of Russia’s natural gas was left to look for alternative suppliers when Russia cut gas flows by 80% between May and October 2022.
Putting domestic security first is not inherently a cause for concern, nor is prioritizing the needs of a country when instability is rampant. What constitutes concern is China’s deviation from some of the most important climate targets the world is counting on it to meet. With the projected increases in China’s GDP and the end of COVID zero, China would need to not only hit near-zero emissions each year, but significantly increase renewable development for it to meet its 2030 and 2060 targets.
In observing the Russia-Ukraine war, one thing is certain: geopolitical instability will always be a defining feature of the international landscape. What cannot be a defining feature is for China, faced with geopolitical instability, to revert to old ways and gravitate away from its commitment to its climate goals.
